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Category > Business & Finance Posted 16 May 2017 My Price 5.00

Loan Payments in a Perfect Market

Loan Payments in a Perfect Market

Suppose that you purchase the forklift for $20,000 by borrowing the purchase price using a four year annuity loan. What would the monthly loan payment be in a perfect capital market where the risk-free interest rate is a 6% APR with monthly compounding, assuming no risk of default? How does this compare with the lease payment of Example 25.1?

Example 25.1

Lease Terms in a Perfect Market

Suppose the purchase price of the forklift is $20,000, its residual value in four years is certain to be $6000, and there is no risk that the lessee will default on the lease. If the risk-free interest rate is a 6% APR with monthly compounding, what would be the monthly lease payment for a four-year lease in a perfect capital market?

Answers

Alpha Geek
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Status NEW Posted 16 May 2017 08:05 AM My Price 5.00

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file 1494923269-Answer.docx preview (186 words )
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